Corruption, governance, investment and growth in emerging markets
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Authors
Everhart, Stephen S.
Martinez-Vazquez, Jorge
McNab, Robert M.
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Date of Issue
2009
Date
2009
Publisher
Taylor & Francis
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Abstract
The article investigates the potential impact of corruption on economic growth by examining the effect that corruption may have on several significant determinants of economic growth, namely, investment in human, private and public capital, and on governance. Our theoretical approach allows for corruption to influence economic growth directly and indirectly through different investment and governance channels. All previous empirical work on this issue has been based on national income and product accounts (NIPA) data, which do not normally break down gross domestic investment into its private and public sector, and if they do, they misclassify investment by public enterprises as private investment, potentially biasing empirical findings. In this article we use a data set from the International Finance Corporation that bypasses these problems. We find that the impact of corruption on the level of public investment appears to be more ambiguous than it has been found in the previous literature. We, however, find that the impact of corruption on the accumulation of private capital is significantly more damaging than what has been pre- viously found. We also find that the impact of corruption on governance is unambiguously negative, which further deters economic growth.
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Article
Description
The article of record as published may be found at https://doi.org/10.1080/00036840701439363
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16 p.
Citation
Everhart, Stephen S., Jorge Martinez Vazquez, and Robert M. McNab. "Corruption, governance, investment and growth in emerging markets." Applied Economics 41.13 (2009): 1579-1594.
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This publication is a work of the U.S. Government as defined in Title 17, United States Code, Section 101. Copyright protection is not available for this work in the United States.